Question

Question 8 Aspen Company's non-callable bonds currently sell for $900. They have a 15-year maturity, an annual coupon of $70, and a par value of $1,000. What is their yield to maturity? Your answer should be between 6.65 and 8.80, rounded to 2 decimal places, with no special characters. Question 9 Micron Technology's bonds currently sell for $1.210 and have a par value of $1,000. They pa 105 annual coupon and have a 15-year maturity, but they can be called in 5 years at $1,100,

Answer 1

8. PV =900
PMT =70
Number of Periods =15
Par Value =1000
Using Financial calculator
N=15;PMT=70;PV=-900;FV=1000;CPT I/Y =8.18%
YTM =8.18%

9. PV =1210
PMT =105
Number of Periods of call =5
Call Value =1100
Using Financial calculator
N=5;PMT=105;PV=-1210;FV=1100;CPT I/Y =7.10%
YTC =7.10%